The euro tumbled on Thursday following the publication of some disappointing Eurozone PMIs.
At the start of the week, hopes for a diplomatic solution to Russia-Ukraine tensions, in addition to a robust fourth quarter wage price index helped to underpin the ‘Aussie’.
This then gave way to a dramatic selloff on Thursday as Russia launched a full-scale invasion of Ukraine.
However the ‘Aussie’ quickly found its feet again as the subsequent spike in commodity prices reflected positively on the Australian dollar.
While a fresh round of sanctions on Russia sapped market risk appetite at the start of this week, the Australian dollar has so far managed to limit its losses after Australia’s latest retail sales figures printed well above expectations.
However the Reserve Bank of Australia (RBA) could pile fresh pressure on AUD exchange rates as it concludes its latest policy meeting this week. No policy changes are expected this week but if the RBA remains welded to its dovish forward guidance the ‘Aussie’ could slump.
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